Vietnam – As the European Union’s Deforestation Regulation (EUDR) is set to take effect on December 31, 2024, Vietnamese businesses have been advised to act promptly to ensure compliance with this new rule, which is crucial for maintaining export activities to the European Union (EU), a major market for Vietnam, according to the Vietnam News Agency.
The Vietnam Trade Promotion Agency, operating under the Ministry of Industry and Trade (MoIT), highlighted that the EUDR, which was issued in June 2023, aims to establish deforestation-free supply chains. The regulation prohibits the import or consumption of products and goods associated with deforestation or forest degradation within the EU. Businesses exporting to the EU must demonstrate that their products do not originate from land deforested or subjected to forest degradation after December 31, 2020.
The EUDR specifically targets commodities with a significant impact on deforestation, including timber, wood products, coffee, cocoa, soybeans, palm oil, cattle and rubber. Of these, three major Vietnamese exports—timber, rubber and coffee—are directly affected by this regulation, representing over 2.5 billion United States dollars (USD) in annual export revenue to the EU.
Hoang Thanh, a representative of the EU Delegation to Vietnam, noted that the EUDR will initially apply to large enterprises starting December 31, 2024, with small and medium enterprises (SMEs) required to comply by June 30, 2025. Only products that meet the criteria of being non-deforestation-compliant and legal will be allowed entry into the EU market or be exported from the EU.
Discussing the challenges posed by the EUDR, Dinh Sy Minh Lang, a representative from the MoIT’s European-American Market Department, warned that the requirements for origin tracing and EUDR certification could increase export costs, particularly for SMEs. Vietnamese products could face intense competition, as businesses from other countries may be better prepared for EUDR compliance.
Lang also pointed out that the difficulty in identifying legal farming zones could impact the accuracy of assessing and classifying risks based on country and production zones. Additionally, controlling input materials in the supply chains of coffee, timber and rubber is complex due to the involvement of multiple layers of traders.
Experts, as reported by the Vietnam News Agency, have emphasized that with the EUDR and other stringent EU regulations approaching, Vietnamese enterprises must swiftly adjust their production processes. Complying with the EUDR could present numerous opportunities, including improving competitiveness, as businesses with sustainable supply chains and quality material sources will be prioritized by European partners.
Thanh added that the EU will assist Southeast Asian countries, including Vietnam, in building capacity, raising awareness and sharing information about EUDR requirements.
The Vietnam Rubber Association has proposed that the Ministry of Agriculture and Rural Development issue technical guidance for the affected sectors so they can develop timely response plans. It also suggested that state agencies devise measures to support businesses in adapting to the EUDR, particularly in terms of positioning data and origin tracing.
Echoing this view, associate professor Dr. Nguyen Thuong Lang from the National Economics University stressed the need for authorities to provide more detailed instructions to enterprises, open a support website or establish groups of related companies and parties to provide updates on the EUDR and other green standards of the EU. He added that it is necessary to issue detailed policies and guidance, set up a question-and-answer unit to quickly meet information demand and conduct surveys to assess their capacity for providing appropriate assistance.
British Columbia – British Columbia’s deputy chief forester has established a new allowable annual cut (AAC) for tree farm license (TFL) 38, located northwest of Squamish, at 117,500 cubic meters. This adjustment represents a reduction from the previous AAC but remains significantly higher than the average annual harvest, which has been just under 72,000 cubic meters since the last AAC determination.
The decision to reduce the AAC considered various factors, including the need to support forestry operations, preserve wildlife habitats, ensure terrain stability, maintain biodiversity, protect cultural resources and safeguard old-growth areas while a long-term management strategy is developed.
To ensure sustainable forestry practices, the new AAC determination incorporates specific partitions. Up to 102,500 cubic meters per year may be harvested from areas below 1,200 meters in elevation. A maximum of 30,750 cubic meters (30 percent), may be sourced from old forest stands; the remaining 71,750 cubic meters (70 percent) can be harvested from stands not classified as old forest and that the TFL overlaps the territories of the five, First Nations, including the Squamish Nation, Lil’wat Nation, Tsleil-Waututh Nation, Klahoose First Nation and the St’at’imc Chiefs Council. These groups were actively consulted during the timber supply review process. Public and industry input was also considered.
The deputy chief forester’s AAC determination is an independent judgment based on a comprehensive review of technical forestry reports, First Nations consultations, public input, and the province’s social and economic objectives. According to the Forest Act, such determinations must be made for each of the province’s 37 timber supply areas and 34 tree farm licenses at least once every 10 years.
Brazil – Brazilian exports of wood-based products (except pulp and paper) were up 9.9 percent recently and in the same month in 2023, from 278.3 million USD to 305.7 million USD.
Pine sawnwood exports increased 33.7 percent in value from 40.1 million in July 2023, according to the most recent data available at press time, to 53.6 million USD in June 2024. In volume, exports were up 31.8 percent, from 173,500 cubic meters to 228,700 cubic meters.
Tropical sawnwood exports decreased 5.3 percent in volume, from 26,400 cubic meters in July 2023 to 25,000 cubic meters in July 2024, based on the most recent information available at press time. In value, exports decreased 14.9 percent from 13.4 million USD to11.4 million USD.
Pine plywood exports increased 13.8 percent in value to 59.2 million USD in July 2024 compared to 52.0 million USD in July 2023, according to the most recent data available at press time. In volume, exports increased 6.8 percent from 159,900 cubic meters to 170,800 cubic meters.
Tropical plywood, exports decreased 35.3 percent in value and 34.5 percent in volume, from 1.7 million USD and 2,900 cubic meters in July 2023 to1.1 million USD and 1,900 cubic meters in July 2024, which is the most recent data available at press time. Wooden furniture export value increased 2.3 percent from 47.5 million USD in July 2023 to 48.6 million USD.
Germany – The monthly price index for lumber and wood-based materials for wooden packaging and pallets recorded increased in August 2024 compared to the previous month, according to the latest data available at press time. The index for solid wood for wooden pallets increased by 0.9 percent compared to July, when it had increased by one percent. At 370.2 points, the key figure was 20.6 percent higher than the previous year’s value.
The index for solid wood for wooden packaging increased by 0.2 percent to a level of 202.6 points after being at 0.4 percent recently. Compared to August 2023, this resulted in an increase of 4.3 percent.
Plywood for packaging also recorded a rising index recently by 0.2 percent to a level of 197.3 points. The index was 5.2 percent below the previous year’s value.
With an increase of 2.3 percent, compared to July to 100.1 points, oriented strand board for packaging increased the most. Compared to the index level in August of 2023, this represents a decrease of 0.2 percent.
China – After ending a decade-long downward trend last year, China’s softwood lumber imports reversed course in the first half of 2024, with shipments through June down six percent compared with shipments in 2023.
Total Chinese imports fell to 8.87 million cubic meters through June, down from 9.47 million cubic meters in the first half of 2023. Lumber deliveries from European suppliers fell to 1.79 million cubic meters, down 16 percent from a year earlier.
Europe remains China’s main foreign supplier, but the region’s share of China’s import market slipped to 20 percent in the first half of 2023 from 22.5 percent. Meanwhile, North America’s share of the Chinese market reached nine percent – up slightly from the first six months of 2023. While North America’s growth is gradual, it marks a reversal of more than a decade of European and Russian species heavily replacing U.S. and Canadian lumber.
Total Chinese lumber imports reached 18 million cubic meters in 2023, up four percent from 2022. The gain ends more than a decade of steady annual declines, including a 10 percent drop in 2022 and a 23 percent drop in 2021.
However, the momentum faded in early 2024 as a slump in the construction industry weakened China’s overall demand for imported lumber in the first half of the year. Rising log and ocean freight costs prompted European exporters to raise prices. In addition, security concerns caused ocean carriers to avoid the Red Sea, delaying the delivery of cargoes.
Lack of demand, resistance to higher quotes from European shippers, and longer delivery times prompted some importers to turn to competitively priced Canadian standard prices. However, the weak Canadian lumber market prompted large-scale production cuts in western Canada. As a result, the supply available to exporters decreased, leading to lower exports to China in the first half of the year.
As usual, Pine dominated U.S. exports to China. The Chinese market imported significantly less Pine from other major Pine suppliers in the first half of this year. For example, Radiata Pine exports from Chile fell 32 percent to 148,053 cubic meters. Radiata Pine shipments from New Zealand fell 25 percent.
China’s softwood log imports fell even more sharply, down 11 percent to 13.25 million cubic meters. Roundwood shipments from Europe fell 58 percent to 1.67 million cubic meters, offsetting a five percent increase in imports from New Zealand to 9.15 million cubic meters. Canadian log exports to China surged 19 percent to 580,000 cubic meters.
Log imports from “other” suppliers increased 22 percent to 1.18 million cubic meters. Most of the suppliers in this category are located on the Pacific Rim.
